On forcing a market entity to comply with the order of the antimonopoly authority

In case of violation of PC standards, market entities, government agencies, and local executive bodies are required to: 1) in accordance with the instructions of the antimonopoly authority, stop the violation and eliminate its consequences, restore the original position, terminate the contract, conclude an agreement with another market entity or amend it, cancel the act recognized by the antimonopoly authority as not complying with the legislation of the Republic of Kazakhstan in the field of competition protection, perform other actions provided for by the instruction; 2) to compensate for the losses caused in accordance with the civil legislation of the Republic of Kazakhstan; 3) to execute the decision of the antimonopoly authority on the imposition of administrative penalties in accordance with the procedure established by the Code of the Republic of Kazakhstan on Administrative Offenses. The order must be executed within a reasonable period of time established by the antimonopoly authority. The Antimonopoly authority monitors the execution of the issued regulations. In case of non-fulfillment of the order, the antimonopoly authority has the right to apply to the court with a claim to compel a market entity, a state body, or a local executive body to comply with the order of the antimonopoly authority (Article 226 of the PC). Thus, the antimonopoly authority of the Akmola region filed a lawsuit against K LLP to enforce the order dated June 23, 2016. It has been established that "K" LLP is included in the local section of the State Register of Natural Monopoly Entities in the Akmola region for the following types of regulated services: provision of an access road for the passage of rolling stock in the absence of a competitive access road; provision of an access road for shunting, loading and unloading, other technological operations of the transportation process, as well as for parking of rolling stock, which is not provided for by the technological operations of the transportation process in the absence of a competitive access road.

On forcing a market entity to comply with the order of the antimonopoly authority

By the Department's order No. 49-OD dated February 3, 2015, tariffs and tariff estimates were approved in a simplified manner. In accordance with paragraph 5 of Article 18 of the Law, subjects of natural monopolies for which tariffs and tariff estimates for regulated services have been approved in a simplified manner are required to submit an application for a review of tariffs and tariff estimates in a general manner no later than nine months. In violation of these requirements, K LLP did not submit an application and documents to the Department within the prescribed time. By the decision of the Council of Economic and Social Council of Akmola region, the claim was satisfied, the court ordered K LLP to comply with the Department's order No. 20 dated June 23, 2016, namely: - to stop violating the legislation on natural monopolies and regulated markets.; - submit applications and documents to the Department for approval of tariffs for regulated types of services, namely: provision of an access road for the passage of rolling stock in the absence of a competitive access road, provision of an access road for shunting operations of loading and unloading other technological operations of the transportation process, as well as for parking rolling stock, unintended by technological operations of the transportation process, provided the absence of a competitive access road provided for in paragraph 8 of the rules; - from now on, strictly comply with the requirements of the legislation on natural monopolies and regulated markets. When carrying out the generalization, some courts pointed out that there was no need for the authorized body to file a claim for coercion to comply with the order, since failure to comply with it entails administrative liability provided for in Article 162 of the Administrative Code. This position of the courts is erroneous, since, despite bringing the market entity to administrative responsibility for non-compliance with the antimonopoly authority's instructions, the offender may continue his inaction and commit violations of competition law.

According to Article 12 of the Administrative Code, such a market entity cannot be repeatedly brought to administrative responsibility for the same offense. The Department of the Aktobe region filed a lawsuit with the Ministry of Economic Development of the Aktobe region to compel JSC "SNPS" to comply with the order dated February 28, 2017 No. 3, arguing that the tax code has been amended in terms of the mineral extraction tax, calculated from the established rate for groundwater volumes, and will be effective from January 1. in 2016. A natural monopoly entity is obliged to reduce tariffs and prices in case of changes in the tax legislation of the Republic of Kazakhstan. JSC was included in the local section of the State Register of Natural Monopoly Entities in the Aktobe region for water supply services by order dated November 3, 2008. According to subparagraph 15) of Article 7 of the Law, a natural monopoly entity is obliged to reduce, in accordance with the procedure established by the authorized body, tariffs (prices, fee rates) or their maximum levels for regulated services (goods, works) provided to all consumers in the event of a corresponding change in the tax legislation of the Republic of Kazakhstan, as a result of which the cost of the natural monopoly entity it is reduced from the date of the introduction of these changes. The reduction procedure is regulated by the Rules for Raising or Lowering Tariffs (prices, rates of fees) or their maximum levels for Regulated services (goods, works) provided, approved by the Order of the Acting Chairman of the Agency of the Republic of Kazakhstan for Regulation of Natural Monopolies dated March 19, 2005 No. 91-OD (hereinafter referred to as the Rules). In accordance with the Rules, the decision to reduce due to changes in tax legislation is issued in the form of an order from the natural monopoly entity itself, after coordination with the authorized body in the field of natural monopoly. At the same time, the Rules do not provide for the procedure governing the refusal of approval for reduction. In case of refusal to agree on a reduction in the tariff, the JSC must apply the tariff previously approved by the Department.

On forcing a market entity to comply with the order of the antimonopoly authority

In this regard, after agreeing on a reduction in the tariff, the Department introduced an order for a corresponding reduction in the tariff, which is subject to mandatory execution. Moreover, the Department's approval letter dated January 11, 2017 No. 03-07/99 does not specify a tariff in the amount of 115.29 tenge/m3. According to paragraph 2 of Article 342 of the Tax Code of the Republic of Kazakhstan, the rates of mineral extraction tax on groundwater are set in the following amounts from one monthly calculation index established by the law on the republican budget and effective on January 1 of the relevant financial year: per 1 cubic meter of extracted groundwater - groundwater extracted by a subsurface user who is a natural monopoly entity and used by him to provide water supply services to water consumers and water supply organizations in accordance with the legislation of the Republic of Kazakhstan on natural monopolies and regulated markets - 0.001. According to subparagraph 2) of paragraph 1 of Article 15 of the Law, state regulation of the activities of a natural monopoly entity is carried out by approving tariff estimates. The tariff estimate for JSC was approved by the order of the Department dated December 25, 2015. Accordingly, the data indicated in the tariff estimate is regulated by Law. The Department issued an order to the JSC dated February 28, 2017 to stop violating the legislation on natural monopolies and eliminate its consequences, with a deadline of February 28, 2017, which the defendant has not executed. By a court decision dated May 18, 2017, the Department's claim was satisfied. Another example, by the decision of the Council of Economic and Social Council of Astana city dated November 7, 2016, which was left unchanged by the decision of the appellate instance dated February 15, 2017, the Committee's claim against JSC "V" for coercion to comply with the order was satisfied. On August 9, 2016, the Committee issued an order No. 30 to the JSC on the elimination of violations of the legislation on natural monopolies and regulated markets by returning income received and unused for the implementation of the investment program, recorded in marginal prices in the amount of 254,563 thousand rubles. tenge, directly to consumers, or if it is impossible to establish a complete list of consumers by reducing the level of the marginal price for the coming period in accordance with the pricing procedure in regulated markets, with the obligation to provide information on its implementation no later than 25 calendar days from the date of receipt of the order. The plaintiff's claim is based on the fact that the defendant did not comply with the order of the authorized body, introduced due to a violation of subparagraph 3-1) of Article 7-3 of the Law, namely, did not fully comply with the measures of the investment program for 2014, taken into account in marginal prices in accordance with the pricing procedure in regulated markets.

According to subparagraph 1) of Article 7-3 of the Law, regulated market entities are required to submit to the authorized body semi-annual information on the execution or non-execution of the investment program (project) included in the marginal price, in a form approved by the authorized body, no later than the twenty-fifth day of the month following the reporting half-year, with its subsequent publication in the media, with the exception of regulated market entities that provide this information in accordance with the laws of the Republic of Kazakhstan. In accordance with paragraph 2-1 of Article 7-2 of the Law, the Committee reviewed information on the execution of the JSC's investment program for 2014 and found that the actual execution of the investment program amounted to 228,716 thousand tenge, while non-fulfillment of the investment program amounted to 254,563 thousand tenge. In addition, subparagraph 3-1) of Article 7-3 of the Law establishes the obligation of a regulated market entity to carry out investment activities. programs (projects) included in marginal prices in accordance with the pricing procedure in regulated markets. According to subparagraph 3-2) of Article 7-3 of the Law, the entity is obliged to return the income received and not used for the implementation of investment programs (projects) included in the marginal prices directly to consumers or, if it is impossible to establish a complete list of consumers by reducing the marginal price level for the coming period in accordance with the pricing procedure in regulated markets. Private definitions issued based on the results of consideration of cases of this category In accordance with Part 1 of Article 270 of the CPC, when cases of violations of legality are identified, the court has the right to issue and send a private definition, and if violations are committed by government agencies, officials and civil servants, the court issues and sends a private definition to the relevant organizations, officials or other persons, those performing managerial functions who are required to report on the measures they have taken within one month. At the same time, the courts, recognizing the actions of the antimonopoly authority as illegal, do not respond by making private determinations on the facts of established violations of legality. The generalization showed that in cases related to the application of antimonopoly legislation in 2017-2018, only two particular rulings were issued in connection with the failure of a representative of an authorized body or a market entity to appear in court. So, according to the results of the consideration of the case on the claim of IP N. A private ruling was issued to the Department of the Akmola region regarding the recognition of actions by the Council of Ministers of the Akmola region as illegal for violating the legality of the Department, which resulted in the non-appearance of its representative at the court session. By the resolution of the Council of Ministers of the Akmola region dated June 10, 2017 in the case of the claim of the Department of the Akmola region to IP S. about the enforcement of the prescription, IP S. She was brought to administrative responsibility for committing an offense provided for in part 1 of Article 653 of the Administrative Code on the fact of contempt of court, expressed in failure to appear in court without valid reasons, and was punished with a warning. 

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